HB 25-1216

House Bill 25-1216, which has been signed into law in Colorado, requires state agencies like the Department of Revenue, Education, and Transportation to justify all their expenses each year starting from fiscal year 2026-27. This means that every expense, whether it's new or existing, must be reviewed for necessity and cost-effectiveness. By 2027-28, this requirement will apply to all state agencies. The bill also mandates training for these agencies on how to implement this budgeting method and requires annual reports to the legislature about its effectiveness. This law aims to improve financial transparency and efficiency in government spending.

Official Summary

In state fiscal year 2026-27, the bill requires the department of revenue, the department of education, and the department of transportation to implement a budgeting method in which all expenses, both existing and new, must be justified for the fiscal year and every function is analyzed for its needs and costs (zero-based budgeting) when submitting a budget request. In state fiscal year 2027-28 and each state fiscal year thereafter, the bill requires all state agencies in all principal departments to implement zero-based budgeting when submitting a budget request. In state fiscal year 2026-27 and each state fiscal year thereafter, the office of state planning and budgeting is required to develop and digitally distribute to state agencies information related to zero-based budgeting training and to provide virtual sessions for the purpose of training state agencies to implement zero-based budgeting. In state fiscal year 2027-28 and each state fiscal year thereafter, the office of state planning and budgeting is required to submit to the general assembly an annual report detailing the effectiveness of zero-based budgeting. All budget requests that implement zero-based budgeting must be publicly accessible on the general assembly's website, and the state auditor is required to conduct periodic financial audits to ensure state agencies' compliance with zero-based budgeting requirements. (Note: This summary applies to this bill as introduced.)

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